Booked the wrong VAT rate – how to correct it

First establish whether the invoice itself is wrong, or whether the invoice is right and the error is only in the accounts. The two are handled differently: the first calls for a credit note, while in the second you should normally not credit the customer at all.

The invoice is right, but was booked with the wrong VAT

This is usually the simpler case. The customer has a correct invoice with 15% VAT, but it was entered into the accounts at 25%. You should normally not credit the customer, because the sales document is already correct. Instead you correct the entry and the VAT code internally. If the error has already fed into a VAT return that has been filed, the return for that period has to be corrected too. The Tax Administration Act lets a business amend VAT returns it has already filed by submitting an amended return. The deadline is normally three years from the original filing deadline.

The invoice itself has the wrong VAT rate

Then changing the bookkeeping is not enough. Where a sales document that has already been sent has to be replaced, the Bookkeeping Regulations require a credit note reversing the original invoice, plus a new, correct sales document. The credit note has to be dated when it is actually issued.

Have you charged too much or too little VAT?

The starting point in the VAT Act is that an amount incorrectly stated as VAT on an invoice must be paid to the state. For the business to reduce its output VAT, the error must as a general rule first be put right in relation to the customer. That normally means corrected sales documentation and the VAT overcharged being refunded or credited to the customer. If the business used too low a rate, the correct VAT has to be calculated and reported. Whether the business can actually charge the difference on to the customer depends instead on the agreement between them. The liability to the state and the claim against the customer are two different questions.

What if you are the buyer and the invoice has the wrong VAT?

If the supplier has charged VAT on something that is actually exempt, or used an obviously wrong rate, ask for a corrected invoice rather than automatically deducting the amount. The fact that an invoice says «VAT» does not in every situation mean the whole amount is genuinely deductible.

Which VAT period should be corrected?

If the VAT was already wrong when the original VAT return was filed, it is normally the original period that has to be corrected by an amended return. But a credit note can also arise from something that happens later – a price reduction or a cancellation, for instance. Different timing rules then apply, and the credit note is normally reported in the period in which it is issued. So do not book every credit note back in time.

The usual VAT rates in 2026

In 2026 the standard VAT rate is 25%. Which services are entirely exempt from VAT, and what that means for deductions, is a separate question. Food and water and sewage services carry 15%, while passenger transport, accommodation and cinema tickets, among others, carry 12%. It is also important to distinguish zero-rated supplies, which carry 0% VAT, from supplies that fall outside the VAT rules altogether.

Does the error affect only one invoice?

A wrong VAT rate usually comes from a system setting or a VAT code that has been used repeatedly. So do not just fix the invoice you happened to notice – map out which periods are affected.

This is general guidance, not advice on your specific case. Deadlines, rates and amounts change – always check the current rules, or get in touch with us.

Is it urgent?

We can work out what actually has to be done, what documentation exists and how quickly it can be sorted. You can also reach us in the evenings and at weekends.

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